The recently enacted labour reforms will boost the well-being of industrious workers and economic growth – Bloomberg
The pandemic has brought to the fore the omportance of compliances in organisations
A company no matter how big and successful is not far from trouble if not careful. It’s not just the poor growth of a company in terms of production and service that may lead to its undoing. It can extend to aspects that you previously might not have had an idea about.
The recent Covid pandemic and economic shutdown have brought the term “Compliance” back to popularity. For those who are not aware of this term. It simply refers to the act of keeping oneself aware of the rule, policy, standard, law, or regulations recognised by a governing body and conforming to it to avoid legal troubles and penalties. This small term however comprises a wide array of laws, including labour and industrial, and areas covering from wages to working hours to the workplace environment and safety to dispute resolution.
One might wonder why so many laws and legislations are required for a company. The answer to this question benefits both the employers and the employees. These sets of rules and regulations have been designed to safeguard the rights of a company, its owner, and the employees who work for the company. The government has provided these laws to people so that they are not exploited from their rightful rewards for their service and their interests are safeguarded.
With the outbreak of the pandemic, industries have experienced an unprecedented economic slowdown that has forced companies and organisations to take drastic measures such as cutting wages and laying off people. Recent studies show that some economists have said that there is a job loss of 40 million people (MRD report) in the country, mostly in the unorganised sectors. Concurrently, organisations are navigating new compliance challenges as a result of the changing scenario.
Change in Labour Laws
In a major boost to labour reforms, three laws, namely Occupational Safety, Health and Working Conditions Code, 2020; Industrial Relations Code, 2020; and Code on Social Security, 2020 have been created by merging 25 Central labour laws. This restructuring will ensure the well-being of industrious workers and give a boost to economic growth. The new labour codes have been designed to universalise minimum wages and timely payment of wages, while also giving priority to the occupational safety of the workers.
Helping employees & employers
The labour reforms will give proper controls to stop exploitation of the labourers. The government’s step to introduce reforms and restructure the entire scattered legal labour law framework during this lockdown could be a step towards a fair work industry. The primary objective will be to safeguard the rights of the employees.
On the other hand, employers will also have better control to run things even in matters such as ‘hire and fire’. The current reforms will ensure such processes go smoothly without the involvement of third parties.
Business and worker-friendliness
What good are labour laws if they can only protect one section of the workforce particularly only from the organised sector? The labour reforms will impact over 500 million workers, which a lot more employees will be taken into account than currently. Apart from taking employers and employees into account, these reforms will also ensure that the parties involved are rewarded fairly and they are satisfied with it.
The Code on Wages will ensure that there is no discrimination in an establishment on the grounds of gender, job roles and that there are reasonable wages and eligible bonuses for the works done in comparison with similar work done by another person elsewhere. These reforms will help bolster India’s ‘Ease of doing business’ credentials on account of the codes ensuring personal and professional satisfaction of employees and owner’s concern on pay, safety, and social security.
The online advantage
The pandemic and the lockdown have introduced norms and measures which are now being considered as the new normal with regards to both work and personal life. These norms attribute to social distancing, hygiene, and safety from contracting diseases. So, it shouldn’t come as a surprise that the future will have minimal physical inspections and the complete use of technology could become an order to have business-oriented meetings.
We have already witnessed the rise of online video conference meetings during this lockdown and it is a fact that the continuation of this practice will be time and cost-efficient in comparison to travelling to a farther place for meetings. All kinds of documentation will also be digitalised so it can be sent across different places without much hassle. This will be the same with ensuring the proper implementation of labour codes.
All documents, tally and accounts can be easily submitted to authorities online on-demand. Errors and mismatches can be easily identified online compared to the earlier days of going through record books and documents. Also online interface with the state authorities and minimal physical inspections will be encouraged with the reforms.
The post-Covid scenario
Covid-19 has been a learning lesson for everybody including the compliance industry. This pandemic has prepared the Compliance industry to be more prepared and flexible in case of further changing scenarios. It has shown even critical escalations and changes can be the new normal.
Although companies seem to revive themselves from the economic slump, this episode of the pandemic has taught firms that it is essential to maintain the culture of being compliant and adapt to quick changes and plan for new and emerging risks and challenge such that Compliance teams can easily mitigate the risk and navigate through a crisis period with ease.
On the other hand, one should never forget organisations that don’t update themselves with these changes can be liable to hefty penalties under the grounds of being non-compliant.
(The writer is Managing Director at Aparajitha Corporate Services Private Limited)